Digital Transformation Reality Check: Not all SaaS companies have benefited from Covid! In fact, I'd argue only 3 (Zoom, Shopify, Fastly) have truly benefited. With Q2 earnings mostly under wraps, we can look at the absolute change in growth rates from Q2 - Q1

Note that I had to break the axis for Zoom

To make it clear what the data is showing: Im simply subtracting Q1 YoY growth from Q2 YoY growth. Zoom grew 355% in Q2 and 169% in Q1 so the difference (355-169) is graphed.

I've tried to normalize for acquisitions as much as I could

Two things to call out:

1. For some, maintaining their high growth rates at this scale is impressive. Crowdstrike grew 85% in Q1 and 84% in Q2. Maintaining that growth is very impressive. Cloudflare, Slack, ZoomInfo, Twilio and Okta all maintained growth >40% across both Q's

2. Agora appears to have a massive drop, but it's a bit misleading. They skyrocketed growth to 166% in Q1 then "decelerated" to 128% in Q2. Again, maintaining growth >100% is quite good

You could probably argue that Zscaler, Docusign and BigCommerce are also Covid beneficiaries, but not nearly to the same extent as the top 3.

I posted a longer thread about this earlier, but here's what I think is happening:

1. For the most part businesses tightened up budgets (especially larger enterprises), reducing spend (and expansions) for only the MOST important priorities

2. While the interest in accelerating digital transformation accelerated for sure, procurement was pushed out

We'll see if Q3 brings back normal software buying cycles, but for now the true Covid winners are:

Zoom
Shopify
Fastly